Korea Stock Market Insights

Tag: Downturn

  • HLB Global H1 2025 Earnings Analysis: Entering a Downturn? Insights for Investors

    1. HLB Global H1 2025 Earnings: What Happened?

    HLB Global reported revenue of KRW 27 billion, an operating loss of KRW 1.6 billion, and a net loss of KRW 4.2 billion in H1 2025. Revenue decreased by 72.5% year-over-year, and profitability worsened.

    2. Analyzing the Decline: Why These Results?

    • Media Commerce Downturn: Revenue from the core media commerce business declined significantly year-over-year. The company appears to have struggled with increased competition and shifting consumer trends.
    • Resource Development Discontinuation: The discontinuation of the resource development (aggregate) business due to poor profitability created a short-term revenue gap.
    • Limited Subsidiary Contribution: Subsidiaries in bio, food/beverage, and cosmetics contributed minimally to overall performance improvement.

    3. Key Investor Checkpoints: What’s Next?

    • Core Business Recovery Potential: Focus on HLB Global’s turnaround strategy for its media commerce business and its plans to enhance competitiveness.
    • Bio Business Milestones: The timing of R&D milestones in the bio business, considered a long-term growth driver, is crucial.
    • Financial Health and Risk Management: Continuously monitor financial risks related to convertible bonds and ongoing litigation.
    • Macroeconomic Impact: Consider the influence of macroeconomic factors such as exchange rates, interest rates, and raw material prices.

    4. Investment Strategy: What Should Investors Do?

    Investors considering HLB Global should carefully analyze the potential for core business recovery, bio business milestones, financial risks, and the macroeconomic environment. A long-term investment strategy is recommended rather than focusing on short-term performance improvements.

    How did HLB Global perform in H1 2025?

    HLB Global reported revenue of KRW 27 billion, an operating loss of KRW 1.6 billion, and a net loss of KRW 4.2 billion in H1 2025. This represents a 72.5% year-over-year decrease in revenue and a shift to losses for both operating and net income.

    What are the main reasons for HLB Global’s poor performance?

    The main reasons are the downturn in the media commerce business, the discontinuation of the resource development business, and the limited contribution from subsidiaries.

    What should investors consider when evaluating HLB Global?

    Investors should carefully consider the potential for core business recovery, the timing of bio business milestones, financial risks, and macroeconomic changes.

  • Sammok S-Form (018310) H1 2025 Earnings Decline: Hit by Construction Slump, What’s the Investment Strategy?

    1. H1 2025 Earnings Analysis: What Happened?

    Sammok S-Form’s H1 2025 revenue decreased by 19% year-on-year to 170.3 billion KRW, and operating profit plummeted by 68% to 16.4 billion KRW. This fell short of market expectations, and the construction slowdown and decrease in orders are analyzed as the main causes.

    2. Analysis of the Earnings Decline: Why These Results?

    In addition to the construction downturn, declining unit prices of aluminum forms and panel forms, rising raw material (ingot) prices, and increasing SG&A expenses combined to exacerbate the decline in profitability. The high debt ratio (111.24%) is also acting as a financial burden.

    3. Investment Strategy: What Should We Do?

    Short-term Investment Strategy: Neutral
    High volatility is expected in the short term, so a wait-and-see approach is recommended. Consider staggered purchases on further declines, but a cautious approach is necessary.

    Mid-to-Long-term Investment Strategy: Buy
    In the long term, benefits from the construction market recovery can be expected. Based on its overwhelming market share and technological prowess, a rapid earnings improvement is anticipated upon market recovery.

    4. Investment Considerations: What to Watch Out For

    • • Continuously monitor construction market trends and government policy changes.
    • • Pay attention to the company’s future growth drivers, such as cost management, new market development, and overseas business expansion.
    • • Be mindful of macroeconomic variables such as interest rate and exchange rate volatility.
    Q: What is Sammok S-Form’s main business?

    A: Sammok S-Form manufactures aluminum formwork used in building and civil engineering construction. It is the leading company in the domestic aluminum formwork market.

    Q: What are the main reasons for this earnings decline?

    A: A combination of factors contributed to the decline, including the construction slowdown, decreased orders, rising raw material prices, falling sales prices, and increased SG&A expenses.

    Q: Should I invest in Sammok S-Form?

    A: A cautious approach is recommended in the short term due to expected stock price volatility. However, a long-term perspective may offer potential benefits from the anticipated construction market recovery.

  • Samil CNS Wins $35M Contract: A Sign of Recovery in 2025?

    1. What Does the $35M Contract Mean?

    Samil CNS has signed a contract with HS Whasung for the supply and assembly of precast concrete (PC) at the Sihwa MTV FC construction site, valued at $35 million. This is welcome news for Samil CNS, which recorded disappointing results in the first quarter of 2025. The contract is expected to significantly contribute to the recovery of its underperforming concrete business.

    2. Why is This Contract So Important Now?

    In the first quarter of 2025, Samil CNS faced significant challenges due to the construction industry downturn and fluctuations in raw material prices. Revenue decreased by 74% year-on-year, and operating profit turned negative. In this context, this large-scale contract is crucial as it provides a foundation for a performance rebound.

    3. So, What’s Next?

    This contract is expected to boost revenue and improve profitability in 2025. The increase in order backlog will also contribute to strengthening financial stability. There is also a high possibility of short-term stock price momentum. However, with the ongoing construction industry downturn, long-term growth depends on securing further contracts.

    4. What Actions Should Investors Take?

    Investors need to approach with caution and not be swayed solely by the potential for short-term stock price gains. A thorough analysis of the contract’s profitability, competitor analysis, and future order outlook is necessary to assess investment risks. Particular attention should be paid to potential risk factors such as a prolonged construction downturn and surges in raw material prices.

    How much will this contract impact Samil CNS’s performance?

    The $35 million contract represents 20.79% of the projected revenue for 2025. It is expected to significantly offset the poor performance in the first quarter and contribute considerably to revenue growth and profitability improvement.

    What is the outlook for Samil CNS’s stock price?

    A short-term stock price increase can be expected, but the long-term stock price will depend on the recovery of the construction industry and further contract wins. Prudent investment decisions are necessary.

    What precautions should be taken when investing?

    Investors should assess investment risks by carefully analyzing external factors such as the prolonged construction downturn and raw material price fluctuations, as well as the specific terms of the contract and competitor trends.